Factors Driving IHSG's Strengthening at the Start of the Week

Indonesia's Composite Stock Price Index (IHSG) saw a significant boost at the beginning of the week, mirroring positive trends in global stock markets. The strengthening was notably spurred by reports of a peace agreement between the United States and Iran.

According to Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas, external factors played a crucial role. The market closely watched developments in the Middle East over the weekend, where US President Donald Trump announced the finalization of a peace deal with Iran. This agreement, set to be officially signed on June 19, 2026, includes provisions such as reopening the Strait of Hormuz, lifting US naval blockades against Iran, and releasing $25 billion in frozen Iranian assets. Iran has also committed to not developing nuclear weapons during final negotiations.

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Kiwoom Research is quite optimistic and recommends a gradual average up.

Suryanata also pointed to the upcoming first Federal Reserve meeting under Kevin Warsh's leadership, where interest rates are expected to remain between 3.5-3.75 percent. "The improving geopolitical situation reduces concerns about global energy supply disruptions and directly increases investor risk appetite," she stated.

On the domestic front, the IHSG was supported by the World Bank's projection that Indonesia's state budget deficit will be around 2.8 percent of GDP in 2026-2027, decreasing slightly to 2.7 percent by 2028. Further bolstering the index is the deepening financial cooperation between Bank Indonesia (BI) and the People's Bank of China (PBOC). This includes expanding local currency transactions, establishing a Renminbi Clearing Arrangement in Indonesia, launching cross-border QR payments between Indonesia and China, and Bank Mandiri's participation in China's CIPS cross-border payment system.

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The improving geopolitical situation reduces concerns about global energy supply disruptions and directly increases investor risk appetite.